Seven years since the end of the Great Recession, and five years since Andrew Cuomo took office as governor, New York state’s economy is in splendid shape.
That’s what the state’s ubiquitous “Open for Business” ad campaign would imply, at any rate.
The facts tell a different story.
While New York has added a total of more than 770,000 private jobs since 2010, it has fallen behind the national pace in the last two years. And most of the state’s employment gain has been concentrated in New York City.
North and west of the lower Hudson Valley, the growth picture is dimmer. Dutchess and Putnam counties, for example, gained a measly 5,000 jobs between 2010 and 2015, a growth rate less than half the state average.
What’s holding us back? The answer is much the same as it has been for generations: High taxes and heavy-handed regulations.
The good news is that the governor has taken some solid steps to address the first problem — including a tight cap on local property tax levies, and reform and reduction of corporate taxes.
Unfortunately, Cuomo has undercut these improvements with some moves that will make the business climate worse — including a just-enacted boost in the minimum wage. In counties north of Westchester, the $9-an-hour minimum is scheduled to rise another 70 cents a year in each of the next five years. The higher wage inevitably will drive up costs to employers, boost prices for consumers, and reduce job opportunities for young, unskilled workers who need work the most.
Along with the higher minimum wage, the state has just enacted the nation’s most expansive paid family leave mandate on private employers.
And, more recently, the Cuomo administration rejected permits needed to construct a natural gas pipeline that would enable Hudson Valley utilities to tap cheaper sources of “fracked” gas from Pennsylvania, rather than relying on supplies from Canada and Mexico.
As if to make up for the damage they’ve just done, Cuomo and legislative leaders recently shifted gears by formed a temporary, seven-member Business Regulation Council to conduct what they promise will “a comprehensive review of New York State’s business climates,” with recommendations due by June 3.
It’s easy to dismiss this as political window-dressing. In fact, if the governor and legislative leaders are serious about improving the business climate, here are three ideas already by bills already introduced but languishing in Senate and Assembly committee:
1. Reform the State Environmental Quality Revew Act, or SEQRA. Despite its name, SEQRA is not an environmental protection law but a state-mandated planning process, which too often serves to stifle job-creating developments that would perfectly consistent with local planning and zoning guidelines. SEQRA needs better procedures and tighter deadlines to prevent needless expensive delays in major projects.
2. Fix the state’s workers’ compensation system. Employers in New York are saddled with the fourth highest workers’ comp premiums in the country, 48 percent above average. At the very least, the Legislature should enact the moderate reforms Cuomo himself proposed as part of his executive budget this year, only to withdraw them in the face of union pressure.
3. Repeal the Scaffold Law. Construction costs in New York are significantly boosted by this law, which makes contractors and property owners absolutely liable for injuries sustained by workers falling from any height. The taxpayer impact of higher public works costs alone has been estimated at $785 million.
There are many more reform priorities where those came from. For example, capping property taxes was a good start, but the state needs to greatly reduce the number of costly mandates imposed on local governments — especially provisions that lock in and drive up the high cost of public employee compensation.
Under Cuomo, the state’s economic development strategy increasingly has consisted of doling out subsidies to corporations promising they will create lots of high-paying jobs in return. But to improve the overall climate, state officials need to work much harder to chip away the vast edifice of taxes and regulations that continues to hinder economic growth in New York.